Struggling With Credit Card Debt? These Genius Tips Can Help

We can write till the cows come home about how you have to cut up your credit cards, stop spending more than you have, create a viable budget, and on and on. But how the hell is that going to help you with your current debt? It’s not.

That’s why we’ve decided to offer you 5 practical but brilliant ways to get rid of your credit card debt as quickly and cheaply as possible.

1. Transfer Your Balance

If you’re paying interest on any credit card debt, a balance transfer is the first solution you want to explore. Why? Because you can usually get a balance transfer credit card offer at 0% interest for 12 months or more.

The way it works is simple. The balance transfer card will pay off your high-interest credit card debt, whether it’s on one card or many. You will then owe money on the new balance transfer card. The advantage is, it will be at the 0% promotional rate and consolidated onto one credit card.

The trick is to keep making the highest monthly payments you can. Each of those payments will be applied against your balance, since there are no interest charges. Hopefully you’ll be able to pay down the loan entirely during the interest-free period.

2. Use A Cash Advance

You won’t see this recommended too often. Credit card cash advances often get a bad rap. In most cases the criticism is fair. Interest rates are high and there’s no interest-free grace period.

That said, from time to time there are promotional credit card cash advance rates of 0%-3% for 6 to 12 months floating around out there. If you can manage to grab one, take out an advance and use it to pay down your credit card debt. It will have the same effect as a balance transfer. Just take into account cash advance fees. which tend to be 2%-5%.

3. Take Out A Home Equity Line Of Credit

The next cheapest method to get rid of credit card debt is the use of a home equity line of credit. Obviously, this only works if you have a home. With rates at historical lows, you’ll be able to access a super low interest rate to pay down your high interest credit card debt.

Just remember, a home equity line of credit is tied to your home. Default and you lose your house. Make sure you can pay back every dime of that loan, on time, every time. Do that, and you’ll be paying a whole lot less in interest than you are today.

4. Negotiate

This takes less chutzpah than you think. Call up the bank and let them know that you’re having trouble meeting your monthly payments. Everything is negotiable, from your principal and your interest rate to your minimum payment and late fees.

Believe it or not, banks are just as afraid of you charging off as you are. You may get dinged on your credit score, but the bank is out of money. They would much rather ease up your monthly payments by reducing your interest rate or cutting your principal in return for immediate payment, than see you buckle and stop paying them back entirely. The best credit card companies will work with you, not against you.

Just ask (politely, contritely and convincingly), and see what happens. Remember: nothing ventured, nothing gained. You miss 100% of the shots you never take. Ask and you shall receive. The squeaky wheels get the grease, etc.

5. Set Up An Installment Loan

Although typically at a higher interest than the options above, an installment loan will allow you to consolidate all of your credit card debt into one loan. You’ll then make a fixed monthly payment for a designated period of time, whether it be 1, 3 or 5 years, until the loan is paid off in full.

There are many different names for this type of loan, from a personal loan to a debt consolidation loan to an installment loan. It’s the loan that all the peer-to-peer lenders like Lending Club and the like are pitching. Beware of the high up-front fees charged by some companies. They’re often hidden in the fine print, but when added to the published interest rate make them no better than a competitively priced credit card.

So here’s the summary: If you’re in debt, make a list of all your credit cards, including store cards, with the outstanding balance associated with each. Then attack your debt with the tools above.

To get out of debt fast, you’ll want to make the largest monthly payments possible, which will reduce your outstanding balance as quickly as possible. Consider creating a monthly budget and cutting back on non-essential expenses, freeing up cash to pay down more of your debt. The faster it’s gone, the better!